Brexit Raises Opportunities for Putin

Brexit Raises Opportunities for Putin

7/6/2016 | 6:12 AM CDT

MOSCOW (AP) -- President Vladimir Putin has remained poker-faced as Britain voted to exit the European Union, but the Russian leader stands to gain significantly from the British departure, which would weaken the EU and create new tensions in the bloc.

With Britain facing a long and messy divorce with the EU, both London's role and, consequently, U.S. influence over EU foreign policy will wither, helping Russia-friendly bloc members in their efforts to mend a rift with Moscow over the Ukrainian crisis.

In the long term, Putin can expect new opportunities for Russia to raise its clout on the continent. The outcome of the British referendum has emboldened euroskeptic parties across the EU, and the rising economic and political uncertainty will only strengthen their positions further.

And even though the financial storm caused by the British departure could raise economic risks for Russia by affecting oil prices and battering Russian stocks, potential political dividends for Moscow from the EU's crumbling would far outweigh the mid-term economic damage.

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The EU has followed the U.S. lead in punishing Russia's action in Ukraine with an array of sanctions, which have cut its access to global financial markets and blocked the transfer of key energy and military technologies. Russia has retaliated by blocking imports of most Western food, a ban that hurt many EU nations.

The EU has just extended its sanctions until February 2017, but as the Ukrainian crisis has dragged on EU members including Italy, Greece, Hungary and Slovakia have shown signs of impatience with the sanctions. They have met stiff resistance from the Baltic nations, Poland and Britain, which have argued that the penalties should stay in place. Britain's departure could weaken the camp of the sanctions' supporters.

"The UK has been a strong supporter of tough sanctions and that resolve may now weaken as London becomes distracted by the unwinding process," wrote Chris Weafer, a senior adviser at the Moscow-based consultancy Macro-Advisory Ltd. He added that the next British government may also have different priorities and look for new export markets to develop.

Both Washington and Brussels have made easing the sanctions contingent on the progress of the 2015 Minsk agreement, which has largely stalled.

The deal, which was brokered by France and Germany, obliged Ukraine to offer a broad degree of autonomy to the rebellious east and amnesty to the insurgents, provisions strongly opposed by nationalists. Ukraine, in turn, has accused Russia of failing to fulfill its obligations by not withdrawing its troops from the east. The Kremlin denies that.

Putin says Moscow shouldn't be held responsible for the Minsk deadlock, and some EU members have become increasingly receptive to that idea. On a trip to Russia's top economic forum last month, Italian Prime Minister Matteo Renzi publicly backed Putin's arguments, saying that Ukraine must meet its side of the bargain.

Renzi's visit reflected both Putin's efforts to cultivate ties with individual EU nations and Italy's strong desire to see the EU sanctions lifted.

Weafer predicted that German Chancellor Angela Merkel also will face increasing pressure to unwind the sanctions from within her government, from industry and from other EU countries.

Even though Putin has refrained from gloating over the British exit, his remarks on a trip to Finland last week signaled his hope that it could play into Russia's hands. Asked what Finland could do to improve trade with Russia amid the sanctions, he responded: "You turn to London, they will tell you what to do."

Long before the Ukrainian crisis, Putin repeatedly vented his frustration with the EU's decision-making process and tried to focus on individual negotiations with the bloc's members. He could redouble such efforts now as the EU is reeling from the British shock.

"It has been the Russian diplomacy's longtime dream to develop separate relations with every big European state," Carnegie's Baunov said. "And Britain has made a step toward that dream."

(KA)

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